UT Finance Asks To Repossess DayJet Eclipses

AINalerts » March 10, 2009
March 10, 2009, 11:40 AM

UT Finance has asked the bankruptcy court overseeing the liquidation of the assets of Eclipse Aviation to allow it to take possession of the 28 Eclipse 500 very light jets that were operated by bankrupt air-taxi operator DayJet. UT Finance–a division of United Technologies and sister company of engine manufacturer Pratt & Whitney Canada–along with Eclipse and Bank of Utah loaned money to DayJet Leasing to buy the 28 jets. UT Finance advanced 80 percent and Eclipse loaned 20 percent of the money, so Bank of Utah was a security trustee. While DayJet Leasing holds title to the jets, Eclipse was the collateral agent until it filed for bankruptcy, in which case UT Finance is allowed to replace Eclipse as the agent. UT Finance wants to take over so that it can move the 28 jets to a safe location and sell them. “The prompt disposition of the DayJet aircraft is critical to maximizing the recovery to UT Finance,” according to the company’s filing. “The first mortgage debt on the DayJet aircraft is in excess of $35 million, and the value of the DayJet Aircraft is significantly less than that amount.” In short, that means UT Finance believes the jets are now worth less than $1.25 million each.

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